The Pharmaceutical Services segment can be broadly segmented into three primary sections: Contract Research Organizations (CROs), Contract Manufacturing Organizations (CMOs), and Pharma Distribution Companies. All three segments, by nature of operating through outsourced contracts from pharmaceutical and biotechnology companies, are highly sensitive to factors affecting the pharmaceutical industry on the whole.
Surveys show that the use of outsourcing is steadily rising with an average of 6.4 services outsourced per firm in 2014, up from 4.7 in 2013 and 2.5 in 2012. Pricing pressures created through intensifying regulation and patent expiration have shifted demand toward more cost-efficient contract organizations.
North America and Western Europe dominate market share, currently accounting for 60% of global CRO and CMO business. The US remains a hotbed for innovation with a focus on innovative R&D; over 50% of recently performed Phase I clinical trials were conducted in the US. Non-western countries, such as China and India, have shown a potential for high growth due to the viability of their own emerging markets and their more competitive input costs, which have drawn international pharmaceutical companies seeking to reduce prices. China and India are projected to account for 19% and 21% of the CMO and CRO market in 2017, up from 12% and 8% in 2012, respectively.
Market share for all segments is increasingly dominated by larger companies able to take advantage of scale and access to global markets. However, small agile players have created significant opportunities by filling gaps in the rapidly changing pharmaceutical landscape
The full report includes a detailed market overview, current market trends, industry trading and transaction comps, recent deal profiles, and a collection of future growth drivers within the space.